Perry Ellis shares soar on special dividend
MIAMI (AP) — Shares of Perry Ellis International Inc. soared Tuesday after the company said it will pay a special cash dividend of $1 per share in an apparent attempt to help investors avoid possible tax hikes on dividend income in 2013.
The total cost to the clothing company, which owns brands such as Jantzen, Laundry by Shelli Segal and Redsand, is roughly $16 million.
Perry Ellis said Monday that it will pay the dividend Dec. 28 to shareholders of record as of Dec. 21.
Many companies are reviewing their dividend policies since investors could pay higher taxes next year. Since 2003 investors have paid a maximum tax rate of 15 percent on dividend income. That historically low rate will expire in January, unless Congress and President Barack Obama reach a compromise on taxes and government spending. As it stands, dividends will be taxed as ordinary income in 2013, the same as wages, so rates will go up depending on which income bracket a taxpayer is in. For the highest earners, the dividend rate would climb to 43.4 percent.
Shares of Perry Ellis jumped $1.32 or 6.5 percent, to $21.86 in Tuesday afternoon trading. Over the past 52 weeks, the stock has traded between $12.88 and $23.28.